New home sales fell in June as new construction takes heat from rising interest rates, according to data from the U.S. Census Bureau and the Department of Housing and Urban Development.
Sales fell by 2.5% to a seasonally adjusted annual rate of 697,000, compared to May’s revised rate of 715,000. They were up 23.8% from the same time last year, however.
The seasonally‐adjusted estimate of new houses for sale was 432,000, up from last month and representing a supply of 7.4 months at the current sales rate.
Homebuilders are working hard to keep inventory flowing, providing options for homebuyers.
“Builders are also responding to this shift by bringing slightly smaller homes to market in an effort to meet lower price points and extending financing incentives for cash-strapped first-time buyers or rate-locked homeowners looking to trade up,” George Ratiu, chief economist at Keeping Current Matters, told CNN.
At the same time, the median existing-home sales price for June jumped to $410,200.
New and old homes are now almost the same price.
Home price appreciation has strengthened in the last month after a five-month period of decline. Demand remains elevated and is increasing through the summer, with prices rising accordingly.
“There are simply not enough homes for sale,” Lawrence Yun, chief economist for the National Association of Realtors, said. “The market can easily absorb a doubling of inventory.”
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